Analysis of the Differentiated Evolution of Wages and Jobs between the Metropolitan and Non-metropolitan Regions of the State of São Paulo from 1998 to 2012

Abstract

This paper analysis the evolution and determinants of employment and wages of the formally employed persons in both metropolitan and non-metropolitan regions of Sao Paulo State. Data from Annual Report of Social Information (RAIS in Portuguese), provided by formal enterprises and aggregated by municipalities, from 1998 through 2012 were used. A neoclassical-based model for labor supply and demand was built up and two reduced employment and wage equations were deducted, in which the explanatory variables emphasize personal features of the employees as well as regional and economic characteristics of the municipalities. Salary and employment equations were run using the generalized method of moments (GMM-SYS). The results highlight the importance of first nature variables in determining both wage and employment as well as confirm the expected signals for other explanatory variables.